REASONS FOR DECISION

[1] The Plaintiff brought a motion for an order referring this action to an Associate Judge for trial, on the basis of s.58(1)(a) of the Construction Act, R.S.O. 1990, c. C.30. The Defendants opposed. I heard this motion on August 18, 2022, and, by oral endorsement, granted the relief sought by the Plaintiff, on the basis of written reasons to follow. These are the reasons for my decision.

I. BACKGROUND

[2] The record showed that Vasso Georgiopoulos is the registered owner of a property known municipally as 3472 Danforth Avenue, Toronto (the “Subject Property”), which is managed by the corporate defendant, MVG Investments Inc. (“MVG”). The Secretary of MVG was Ms. Georgiopoulos’ late husband, Mike Georgiopoulos.

[3] The Plaintiff, Jody Voutour leases and resides in a unit in the Subject Property. According to Mr. Voutour, on or about January 1, 2020, Mr. Georgiopoulos caused MVG to enter into an oral contract with Mr. Voutour for the repair of a unit in the Subject Property, which he alleges to have completed on November 8, 2021.

[4] Mr. Voutour claims that he has not been paid for his general contracting services, consisting of the supply of labour and materials, which he totals in the amount of $30,142.00. On November 26, 2021, the Plaintiff issued and registered a Construction Lien against title to the Subject Property in the amount of $30,142.00, registered as instrument number AT5922051 (the “Construction Lien”).

[5] On December 7, 2021, Mr. Voutour initiated this action for recovery of the amount of $30,142.00, plus interest and costs. The Defendants delivered their Statement of Defence on December 22, 2021, denying the alleged oral contract, denying the outstanding amount claimed by the Plaintiff, and pleading that the Construction Lien should be discharged.

[6] On January 31, 2022, the Defendants brought a motion before Associate Justice Wiebe for an order under s. 47 of the Construction Act discharging the Plaintiff’s claim for lien, vacating the certificate of action, and dismissing this action on four grounds:

(a) That the contract that allegedly gave rise to the lien claim is an oral contract and prohibited by the Statute of Frauds, R.S.O. 1990, c. S.19.

(b) That the action is against heirs, executors, next of kin, administrators and assigns of a deceased person and thereby requires corroborating evidence under s. 13 of the Evidence Act, R.S.O. 1990, c. E.23 and cannot proceed to judgment without corroboration.

(d) There is no claim for unjust enrichment.

[7] Associate Justice Wiebe dismissed the Defendants’ motion and awarded costs to the Plaintiff in the amount of $7,634.00 (Voutour v. MVG Investments Inc., 2022 ONSC 1610). The Defendants sought leave to appeal the decision of Associate Justice Wiebe to the Divisional Court. The leave to appeal application was dismissed on June 3, 2022 with costs payable by the Defendants to the Plaintiff within 30 days in the amount of $2,667.93 (Voutour v. MVG Investments Inc., 2022 ONSC 3196).

[8] On March 29, 2022, Ms. Georgiopoulos paid the sum of $37,677.50 into Court to stand in credit to this action, further to the registered lien.

[9] At a Case Conference conducted on July 13, 2022, Justice F.L. Myers scheduled the hearing of this motion, granting leave to the Plaintiff to move, without notice, for an order striking the Statement of Defence if the Defendants did not satisfy the outstanding cost awards or if the director of the defendant corporation did not, by August 3, 2022, attend an examination in aid of execution. The parties stated that the Defendants have now paid the cost awards.

II. THIS MOTION

[10] The Plaintiff brought this motion for an order referring this action to an Associate Judge for trial, on the basis of s. 58(1)(a) of the Construction Act, which provides as follows:

58(1) On motion made after the delivery of all statements of defence, or the statement of defence to all crossclaims, counterclaims or third party claims, if any, or after the time for their delivery has expired, a judge may refer the whole action or any part of it for trial,

(a) to an associate judge;

(b) to a person agreed on by the parties; or

(c) if the action is for an amount that is within the monetary jurisdiction of the Small Claims Court, as set out under section 23 of the Courts of Justice Act, to a deputy judge of that Court or to the Small Claims Court Administrative Judge.

[11] The Plaintiff submitted that s. 58(1) provides the Court with discretion to refer an action for trial (“a judge may refer the whole action or any part of it for trial”) to either an Associate Judge; a person agreed on by the parties; or, where the action is within the monetary jurisdiction of the Small Claims Court, to the Small Claims Court Judge. The Plaintiff submitted that as the parties have no agreement on a person to hear the trial, the remaining options for referral are to an Associate Judge or to the Small Claims Court. The Plaintiff’s position is that the circumstances of this case support an exercise of discretion to refer this action for trial by an Associate Judge.

[12] The Defendants submitted that this motion raised an issue of statutory interpretation. The Defendants’ position was that s. 58(1)(c) of the Construction Act establishes a condition precedent where if a lien action falls within the monetary jurisdiction of the Small Claims Court, there is a duty on this Court to refer the action to the Small Claims Court for determination. If I should reject the statutory interpretation urged by the Defendants and instead find that the Court has jurisdiction to refer this action for trial by either an Associate Judge or by a Small Claims Court Judge, the Defendants offered no compelling reason for the referral of this action to the Small Claims Court for trial.

[13] I accepted the Plaintiff’s position, for reasons that I will explain.

III. ANALYSIS

[14] The Defendants could not identify any case that has held that s. 58(1) of the Construction Act mandates that a Judge refer an action for trial by the Small Claims Court where the action is within the monetary jurisdiction of the Small Claims Court. The Defendants acknowledged that s. 58(1) contains wording that confers discretion to the Court in referring an action for trial (“a judge may refer the whole action or any part of it for trial”) and does not contain the word “shall”. There was no dispute that the use of the word “may” in a statutory provision implies the exercise of discretion.

[15] The Defendants submitted that this motion raises a “novel” issue of statutory interpretation, wherein the discretionary wording in s. 58(1) (“may refer”) must be interpreted as “shall refer” and thereby imposes a mandatory duty to refer to the Small Claims Court where the action is for an amount that is within the monetary jurisdiction of the Small Claims Court.

[16] Apart from unhelpful reliance on a 62-year-old decision of the British Columbia Court of Appeal that dealt with interpretation of an 1890 Act pertaining to the grant of public land for railway use,[^1] and reference to statements of undisputed, general principles from a treatise on the construction of statutes,[^2] the Defendants’ submissions on their interpretation of s. 58(1) of the Construction Act rested on a flawed understanding of the principles set out by the Court of Appeal in Duggan v. Durham Region Non-Profit Housing Corporation, 2020 ONCA 788, 153 O.R. (3d) 465.

[17] In Duggan, the Court of Appeal considered whether the Court has the discretion to order the bifurcation of a civil action under Rule 6.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, in the absence of the consent of the parties. Rule 6.1.01 provides that: “With the consent of the parties, the court may order a separate hearing on one or more issues in a proceeding, including separate hearings on the issues of liability and damages (emphasis added)”.

[18] The Court of Appeal held that the parties’ consent to bifurcate is a precondition to the Court’s exercise of discretion: Duggan, at paras. 31, 39, 47. The Defendants submitted that the Court of Appeal held that when that precondition is met – in that the parties have consented to bifurcation – the Court had no further discretion on whether to bifurcate. The Defendants stated that this finding must be applied to this case, with the result that when the action comes within the monetary jurisdiction of the Small Claims Court (said to be the pre-condition under s. 58(1)(c)), the Court must refer the action for trial by a Judge of the Small Claims Court.

[19] I reject this submission. In Duggan, the Court of Appeal held that where the parties do not consent to bifurcation, the Court is precluded from making such an order. However, the Court instructed that where the parties consent to bifurcation, the Court has the discretion to make an order for bifurcation but, in the exercise of its discretion, the Court is not mandated to do so: Duggan, at paras. 37-39. The Court of Appeal made clear that “may”, in the context of Rule 6.1.01 “can only have one meaning: the court can refuse to grant the bifurcation motion despite the consent of the parties”: Duggan, at para. 44.

[20] Applying the principles set out in Duggan to the discretion afforded by s. 58(1) of the Construction Act, when the pre-condition set out in s. 58(1)(c) is established – specifically, “the action is for an amount that is within the monetary jurisdiction of the Small Claims Court” – the Court has the discretion to refer the action to the Small Claims Court for trial, or not. The Court is not, in my view, mandated to refer the action to the Small Claims Court for trial when the action is within the monetary jurisdiction of the Small Claims Court. Rather the referral remains within the Court’s discretion. Like in Duggan, the “may”, in the context of s. 58(1)(c), can only have one meaning: the Court can refuse to refer the action for trial to the Small Claims Court even though the action falls within the monetary jurisdiction of the Small Claims Court.

[21] Apart from being consistent with the principles set out in Duggan and, in my view, principles of statutory interpretation, this interpretation is concordant with the s. 23 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which restricts the jurisdiction of the Small Claims Court to actions within its monetary jurisdiction. Accordingly, the discretion in s. 58(1)(c) to refer an action for trial to the Small Claims Court is only available when the action is within the jurisdiction of the Small Claims Court.

[22] Having found that I have authority, in the exercise of my discretion, to refer this action for trial by either an Associate Judge or to the Small Claims Court Administrative Judge, I will explain why I exercised my discretion to refer this action for trial by an Associate Judge.

[23] My analysis begins with the Supreme Court of Canada’s statement in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, 2014 SCC 7, at para. 28 that the “process [of adjudicating disputes] is illusory unless it is also accessible – proportionate, timely and affordable.” The Defendants submitted that I should refer the trial in this action to the Small Claims Court because it should have been started there, given that the monetary amount in issue is within the Small Claims Court jurisdiction. I do not accept this submission. The question raised on the motion is not whether this action ought to have been initiated in the Small Claims Court, but rather how, in the circumstances of this action at this time, this action might be adjudicated in the manner that is most “proportionate, timely and affordable”.

[24] Several elements of the evidentiary record support the referral of this action for trial by an Associate Judge. First, the Defendants have already availed themselves of this Court in their unsuccessful motion to an Associate Judge under s. 47 of the Construction Act to discharge the Plaintiff’s claim for lien, to vacate the certificate of action, and to dismiss this action. I do not see how it would be fair and just to deny the Plaintiff his request for trial by an Associate Judge when the Defendants have brought this matter already to an Associate Judge for consideration of its merits. Second, the Defendants have paid the amount in dispute into this Court and require an order of this Court for these funds to be paid out to the successful party.

[25] Third, the Plaintiff tendered evidence from the Associate Judge’s construction lien registrar that a two-day trial in this action “could be scheduled next week”. The Plaintiff’s direct inquiries of the Small Claim’s Court did not result in direct evidence regarding the timing for a trial in the Small Claims Court. But the Plaintiff’s investigations, through his process server, caused him to form the information and belief that the Small Claims Court is currently hearing trials listed in 2020 and 2021. Based on the evidence in this record, I accept that a referral of this action for trial to the Small Claims Court will, at this time, result in more delay than a referral to an Associate Judge.

[26] And fourth, the Associate Judge has broad powers under s. 58(4) of the Construction Act to direct and manage the trial of this action in an efficient manner that is proportionate to the amounts in issue.[^3]

[27] While the parties are in conflict regarding the issues raised by this action, the Supreme Court’s pronouncements in Hryniak call for them to have a shared objective in implementing for their clients the most proportionate, timely and affordable process for determination of their dispute. In the exercise of my discretion under s. 58(1) of the Construction Act, considering the issues raised by this action, its history and status, I concluded that the most proportionate, timely and affordable process for determination of this action is by referral to an Associate Judge.

IV. DISPOSITION

[28] On the basis of these Reasons, an Order shall issue as follows:

(a) This action shall be referred to an Associate Judge at Toronto for trial.

(b) The parties found liable forthwith after confirmation of the report of the Associate Judge shall pay to the parties the respective amounts due them.

(c) The Associate Judge shall determine all questions arising in this action and on the reference and all questions arising under the Construction Act and that the findings of the Associate Judge shall be effective on the confirmation of the report.

(d) The Associate Judge shall determine the question of costs in this action and of the reference, and the costs shall be assessed and paid as the Associate Judge shall direct.

V. COSTS

[29] Although the issue of costs of this motion could have been heard at the conclusion of the hearing of this motion, upon the rendering of my decision, the Defendants requested, and were granted a process for the determination of the issue of costs after the release of my Reasons for Decision, by written submissions, in accordance with Rule 57.01(7).

[30] Accordingly, if the parties cannot agree on the issue of costs of this motion, the Plaintiff may, within 10 days of the date of release of these Reasons, deliver written submissions on costs, of no more than 3 pages. The Defendants shall then deliver their written submissions on costs, of the same page length, by no more than 10 days after receipt of the Plaintiff’s written cost submissions. The parties shall deliver their written submissions on costs to the Toronto Motions Coordinator, with copy to my judicial assistant. If no written submissions on costs are delivered within 20 days, the issue of costs shall be deemed to have been settled.

A.A. Sanfilippo J.

Dated: August 26, 2022

COURT FILE NO.: CV-21-00661327-0000

DATE: 20220826

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JODY VOUTOUR

Plaintiff

– and –

MVG INVESTMENTS and VASSO GEORGIOPOULOS

Defendants

REASONS FOR DECISION

AA. Sanfilippo J.

Dated: August 26, 2022

[^1]: Crow's Nest Pass Coal Co. (Ltd.) v. The Queen, California Standard Co., Canadian Gulf Oil Co. and British American Oil Co. Ltd., [1960] 25 D.L.R (2d) 110 (BC C.A.). [^2]: Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham Ont.: LexisNexis, 2014) pp. 84-85. [^3]: Construction Act, s. 58(4): An associate judge to whom a reference has been directed has all the jurisdiction, powers and authority of the court to try and completely dispose of the action and all matters and questions arising in connection with the action, including the giving of leave to amend any pleading and the giving of directions to a receiver or trustee appointed by the court.

Voutour v. MVG Investments, 2022 ONSC 4911

Case Summary

REASONS FOR DECISION

I. BACKGROUND

II. THIS MOTION

III. ANALYSIS

IV. DISPOSITION

V. COSTS

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1

Legislation 5